Studio Lease Agreement

STUDIO LEASE AGREEMENT


THIS STUDIO LEASE AGREEMENT, is entered into as of the 29th day of August, 1997, by and between The Hearst Corporation ("Hearst" and also herein referred to as "Tenant"), a Delaware corporation, and Argyle Television, Inc. ("Argyle"), a Delaware corporation.


WHEREAS, Hearst and Argyle have entered into an Amended and Restated Agreement and Plan of Merger dated as of March 26, 1997 (the "Merger Agreement") pursuant to which certain Hearst subsidiaries will, subject to the terms and conditions of the Merger Agreement, merge with and into Argyle; and


WHEREAS, Argyle will be the surviving corporation under the Merger Agreement and will be renamed Hearst-Argyle Television, Inc. ("HAT" and also herein referred to as "Landlord"); and


WHEREAS, Hearst, or a subsidiary, is the licensee of radio stations WBAL(AM) and WIYY-FM, Baltimore, Maryland (each a "Radio Station" and collectively, the "Radio Stations"); and


WHEREAS, the Radio Stations occupy certain space and facilities within certain premises, which premises will at the Effective Time (as such term is defined ill the Merger Agreement), become the property of HAT; and


WHEREAS, in connection with the Merger, HAT will become the owner of television station WBAL-TV, Baltimore, Maryland; and


WHEREAS, it is the intention of the parties hereto that the Radio Stations will continue to occupy and use such premises following the Effective Time on terms and conditions set forth hereinafter; and


WHEREAS, this Studio Lease Agreement is entered into in accordance with Section 9.02(i) of the Merger Agreement and in further consideration thereof;


NOW, THEREFORE, Hearst and Argyle hereby agree as follows:


1. Leased Premises. Landlord is the owner of certain real property and a building located at 3800 Hooper Avenue, Baltimore, Maryland 21211, which is used for the main studios and transmission facilities of Television Station WBAL-TV. A portion of such premises (including parking areas and facilities and driveway) is occupied and used by the Radio Stations, which portion is more particularly described in Exhibit A attached hereto and made a part hereof (the "Leased Premises"). Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the "Leased Premises". 2
2. Term of Lease. The term ("Term") of this lease shall be for a period of 36 months commencing at the Effective Time and unless sooner terminated as provided in this Lease, ending on a date (the "Expiration Date") which shall be the 36 month anniversary of the Effective Time.


3. Rent. In accordance with Section 9.01(i) of the Merger Agreement, Hearst and Argyle have entered into a Management Services Agreement of even date with this Studio Lease Agreement whereby HAT will provide certain management services to Hearst with respect to the Radio Stations, and Hearst will pay HAT certain amounts in consideration of such services. For each year during the Term, the full and complete consideration to Landlord for this Studio Lease Agreement shall consist of: (a) those annual amounts payable to HAT under said Management Services Agreement, plus (b) the annual costs related to the Services provided by the Landlord to the Radio Stations, which the parties agree shall be substantially similar to the annual expense amounts Hearst has historically allocated to the Radio Stations (by way of example, Exhibit B hereto sets forth the 1997 expense amounts Hearst has allocated to the Radio Stations). Such consideration shall be subject to pro rata adjustments for partial years of the Term. Such consideration includes all amounts whatsoever (as rent or otherwise) payable by Tenant to Landlord with respect to this Studio Lease Agreement, and Tenant shall not be obligated to pay any additional amounts to Landlord. In the event that said Management Services Agreement shall terminate prior to the expiration or termination of the Term hereunder or a Radio Station shall be sold to a third party as contemplated by Section 2, then Landlord and Tenant shall negotiate in good faith amounts payable to Landlord in consideration of this Studio Lease Agreement.


4. Services. During the Term, Landlord shall operate and maintain the Leased Premises in a manner consistent with past practice with respect to the operation and maintenance of the Building by Hearst Broadcast Group and in accordance with all applicable laws and regulations and shall provide the following services to the Leased Premises: (i) all utilities, including heat, ventilation, cooling, lighting, and electrical service; (ii) insurance; (iii) telephone; (iv) building maintenance, and (v) janitorial service and all other services as needed by Tenant consistent with past practice with respect to Services previously provided by Hearst Broadcast Group to the Radio Stations (the "Services"). Landlord shall maintain and repair the foundations, structure and roof of the Building and shall operate, maintain, repair and replace the systems, facilities and equipment necessary to provide the services described in this Section.


5. Taxes. Tenant shall not be responsible for payment of real estate or other taxes, and any increases or escalations thereto on its portion of the real property during the Term, except with respect to those allocations payable by Tenant pursuant to paragraph 3(b) above.


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6. Landlord's and Tenant's Liability.


(a) Landlord will not be responsible for any damage to Tenant's property, business, or agents or employees resulting from any electrical power failure, fire, lightning, windstorm or Force Majeure Event, or any other damage or loss not caused by the gross negligence or intentional wrongdoing of Landlord or its employees. Landlord's liability to Tenant in the event of any loss or damage to Tenant's property or the Leased Premises caused by the gross negligence or intentional wrongdoing of Landlord or its employees shall be limited to the cost of repairing or replacing such property, plus any reasonable and necessary costs of removing and reinstalling such property. Landlord shall not be liable for any loss of business, or for any consequential damages whatsoever caused by gross negligence or the intentional wrongdoing of Landlord or its employees.


(b) Tenant will not be responsible for any damage to Landlord's property, business, or agents or employees resulting from any electrical power failure, fire, lightning, windstorm or Force Majeure Event, or any other damage or loss not caused by the gross negligence or intentional wrongdoing of Tenant or its employees. Tenant's liability to Landlord in the event of any loss or damage to Landlord's property or the Building caused by the gross negligence of Tenant or its employees shall be limited to the cost of repairing or replacing such property, plus any reasonable and necessary costs of removing and reinstalling such property. Tenant shall not be liable for any loss of business, or for any consequential damages whatsoever caused by gross negligence or the intentional wrongdoing of Tenant or its employees.


7. Additional Construction. Any plans for alterations, additions, improvements or any other additional construction and installation by Tenant shall be submitted to Landlord for its approval in writing. Landlord hereby agrees not to unreasonably withhold or delay its consent regarding any such alterations, additions or improvements. No such approval is necessary for the continued operation and maintenance of the equipment and facilities in place at the time of the execution of this Agreement. The installation and construction shall conform with all requirements imposed by the Federal Communications Commission and all other federal, state and local governmental agencies.


8. Destruction of Premises.


(a) If Landlord's building is totally destroyed by wind, explosion, fire, or other casualty of any kind, either Tenant or Landlord shall have the option of terminating this Lease or any renewal thereof, upon giving written notice at any time within thirty (30) days from the date of such destruction, and if the lease be so terminated, all rent shall cease as of the date of such destruction.


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(b) If Landlord's building should be damaged by wind, explosion, fire or other casualty (or if totally and completely destroyed and neither party elects to terminate this Lease Agreement within the provisions of subparagraph (a) above), then in either event, the Landlord may, at its sole cost and expense, restore building to a condition substantially similar to that immediately prior to such destruction or damage. Landlord shall be entitled to all proceeds of any insurance policies in the event it undertakes repairs. In such case, all rents paid in advance shall be apportioned as of the date of damage or destruction and all rent thereafter accruing shall be equitably and proportionately suspended or adjusted according to the nature and extent of the destruction or damage, pending completion of rebuilding, restoration or repair, except that in the event the destruction or damage is so extensive as to make it unfeasible for Tenant to conduct Tenant's business on the Leased Premises, the rent shall be completely abated until building is restored by the Landlord. The Landlord shall not be liable for any inconvenience or interruption of business of Tenant or of any damage of any kind to Tenant's property or equipment occasioned by electrical interference, wind, explosion, fire or other cause or casualty of any kind not attributable to the Landlord. In lieu of restoring the building as set forth in this paragraph, Landlord may terminate the lease upon ninety (90) days prio ...